Prior to the advent of capsule endoscopes (CE), imaging and examination of the small bowel was difficult. Today, a patient swallows the capsule with an imaging camera, which is then carried passively through the gastrointestinal (GI) tract by peristalsis. The onboard camera captures images of the lumen wall several times per second over a 7-11 hour period, relaying them wirelessly to a body worn receiver where they are stored for subsequent physician review. The resulting large set of images gives the physician an unprecedented ability to examine the gastrointestinal anatomy. Although the physician is able to detect lesions through reviewing the vast number of images, it is very difficult to know where the lesion is located within the GI tract with current technology. The lack of location information slows or prevents surgeons from finding and excising a specific lesion, increasing surgery duration and morbidity. A better localization method is needed to improve the outcome of post-capsule endoscopy surgeries. Koronis Biomedical Technologies Corporation (KBT) proposes to develop a localization method for tracking endoscopic capsules based on magnetic sensing using solid-state thin-film Tunneling Magnetoresistive (TMR) technology. TMR sensors provide excellent magnetic sensitivity per sensor volume allowing integration of a 3-axis sensor assembly within the miniature capsule. Adding capsule location and orientation information to each image recorded by the device significantly improves the ability to diagnose lesions and provide a roadmap for location of needed therapy.